Chinese companies raised a mountain of money from bank loans and
the stock market last year as China's rapid economic growth
generated a huge demand for capital.
Domestic non-financial institutions raised 3.99 trillion yuan
(US$511.2 billion) in 2006, up 30 percent year-on-year, according
to a monetary policy report released by the central bank.
Bank loans, which remained by far the largest source of
financing for Chinese companies, rose 33 percent to 3.27 trillion
yuan.
Stock markets contributed a further 224.6 billion yuan to these
non-financial institutions, compared with 105.3 billion yuan in
2005.
Chinese companies opted for the yuan-denominated A-share market
as their first choice for direct financing as the country's
shareholding reforms progressed and the capital market revived,
according to Shanghai Securities News.
Last year Chinese companies raised a record 559 billion yuan
from domestic and overseas stock markets, up 197 percent. About 43
percent, or 242 billion yuan came from the A-share market.
Companies were less successful in raising money via corporate
bonds because the Chinese bond market lags behind the stock market,
said the report.
Even though corporate bond subscriptions increased 12.7 percent
to 226.6 billion yuan last year, their contribution to total
capital raised by Chinese companies dropped 0.9 percentage points
to 5.7 percent.
(Xinhua News Agency February 12, 2007)